Building the Northern Powerhouse: How Do We Boost Transformative Infrastructure Investment in Northern England? Graham Winch and Rehema Msulwa
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Infrastructure@Manchester 1 Infrastructure@Manchester Building the Northern Powerhouse: How do we boost transformative infrastructure investment in Northern England? Graham Winch and Rehema Msulwa Report 1 of 4 2 Building the northern powerhouse: How do we boost transformative infrastructure investment in northern England? Infrastructure@Manchester 3 The publication of Transport When Barclays became the first for the North’s Strategic bank recognised as a UK Transport Plan in February Government official partner in 2019 was a momentous delivering the Northern Powerhouse step for the Northern programme, I was determined to Powerhouse. The Plan keep the momentum going in the builds on the work of the drive for equality of prosperity Northern Powerhouse across the whole UK. We went on to Independent Economic help found the independent, Review published in 2016 business-led Northern Powerhouse and shows how the North Partnership, coordinating campaigns can move from a “predict and economic advocacy across all and provide” to a “vision sectors based here in the north. and validate” approach to infrastructure development. The economy of the North of England continues to fall We are delighted to be working in partnership with Barclays This commitment is a personal one. As a proud Our commitment goes beyond this, however. We are behind that of the South East, and a core part of reversing on this series of thought pieces from Infrastructure@ Yorkshireman, I joined Barclays as an apprentice in Barnsley determined to convene the north of England’s most that relative decline is transformative investment in Manchester here at Alliance Manchester Business School, over 35 years ago, and as my career has progressed, I’ve experienced and influential businesses, policymakers and transportation, energy, and digital infrastructure. which aims to support the development of transformative remained firmly rooted in this part of the world, doing my academics, working with them to generate new and Together these will enable the Northern region to yield infrastructure for the Northern Powerhouse. best to help clients, customers and colleagues along the innovative solutions for improving prosperity for this the kind of dynamic economic benefits from which the way. I’ve never been more excited at the role we can and dynamic and potential-rich part of the UK. South East has long benefited. Improved infrastructure The first two papers in the series lay out the challenges for the should play in unleashing the next generation of technology, means employers will be able to draw from a wider pool of Northern Powerhouse in financing and funding infrastructure skills and innovation to deliver wealth and prosperity for I am delighted to introduce this new research series, skilled workers; stimulate innovation through more intense investment, while the last two in the series turn to the society and business across the north of England. Infrastructure@Manchester, from Alliance Manchester Business interaction; and facilitate access to higher paying jobs for challenges in delivering infrastructure assets once they have School. The series is one of our flagship thought partnerships those in the more impoverished parts of the region. been financed to the budgets and schedules expected. Barclays’ heritage across the north stretches back as far as in support of the Northern Powerhouse programme, and one the late eighteenth century. We were involved in some of the I’ve been greatly looking forward to. Whilst the views and Together with investments in skills and education, the most crucial infrastructure investments of the time, such as opinions expressed are those of the University’s academics and North’s new infrastructure plans will transform economic the financing of the Manchester Ship Canal in the 1890s and not Barclays, we are nonetheless pleased to be part of shaping growth, particularly in the high tech, professional services, the Stockton to Darlington Railway earlier that century. the policy debate about the north of England’s exciting future. and cultural sectors. Today, we are proud of have a significant presence in the region - with 12,000 colleagues employed across the This higher rate of growth is only sustainable if it is regions, innovative and world-leading contact and accompanied by decarbonisation of transportation technology centres at Sunderland, Wavertree and Radbroke, through smart digital ticketing, electrification of motive and 2019 sees the first anniversary of our popular £500m power, and promotion of active travel. This will also make Professor Fiona Devine CBE Northern Powerhouse Growth Fund to help SME’s grow and Tony Walsh our cities healthier and more pleasant places to live. Head, Alliance Manchester Business School scale across the north. Head of North and Mid Corporate, UK Barclays 4 Building the northern powerhouse: How do we boost transformative infrastructure investment in northern England? Infrastructure@Manchester 5 Executive summary Understanding the role of infrastructure and its value Welcome to the first in a series of papers in a new research Infrastructure is the cornerstone of modern This research will focus on economic infrastructure such as economies and productive societies. transportation, energy, and digital technology with the potential to transform the economic performance of the programme, Infrastructure@Manchester, produced by Increasingly complex and interconnected Northern Powerhouse. We will not cover direct consumption infrastructure services – unimaginable even a goods such as housing, or social infrastructure such as Alliance Manchester Business School and Barclays. decade ago – are required to address the hospitals. These are no less important, but play a different role in economic development. challenges of today’s world. These challenges The purpose of this research is to support the development of In this first paper, we will argue that transformative range from social stability, rapid urbanisation The variety of infrastructure services (see technical below) economic infrastructure for the Northern Powerhouse by infrastructure investment in Northern England is presently and technological advances to globalised offered by infrastructure assets is indicated in Technical Note: faced with two main challenges. First, it suffers because Infrastructure Services Classification, on page 21. providing original analysis and ideas, thereby challenging issues such as climate change2 preconceptions about infrastructure development policy. of the historic under-investment by the UK as a whole in . which details a series of definitions of infrastructure infrastructure, and second it suffers because the investment services, developed from earlier Alliance Manchester 3 There is a huge opportunity for policymakers at all levels in transformative infrastructure that has been made favours Business School research . across the UK to fully unlock the benefits of infrastructure the South East. If the UK is to achieve the ambitions of the investment in order to achieve the aims of the Industrial Industrial Strategy for the whole country, both of these Strategy. This will require a number of significant changes to challenges need to be addressed. More specifically, we will: current best practice in infrastructure investment. Our methods for selecting projects will need to change so that they • Explain why infrastructure investment is important for Technical Note: Infrastructure Services capacity to earn future income; and third, it affects real reflect the full range of benefits from the investment, thereby economic development in the Northern Powerhouse wealth. Infrastructure services are, therefore, valued as stimulating growth rather than following growth. Our methods through an evaluation of the current context. According to the World Bank, the primary measure of essential for health and the creation of environmental of project delivery will also need to change so that promises economic benefits from infrastructure derives from the amenities (e.g. water and sanitation); made in the investment case are met rather than overrun. We • Distinguish between enabling and transformative operation and the value of the services generated by or as items of consumption in their own right (e.g. believe that such a modernisation will be crucial in realising the infrastructure assets and the infrastructure services the physical asset, rather than the asset itself. To that recreational transport, residential ambition of rebalancing the UK economy and ensuring all areas they provide. end, infrastructure services contribute to economic telecommunications). Moreover, infrastructure of the UK benefit equally from infrastructure investment. This development both by increasing productivity and by services provide access to jobs, education, and way, every pound spent will contribute to greater levels of • Review the financing of infrastructure, identifying providing amenities which enhance the quality of life. opportunities for the consumption of other goods. national productivity, stronger levels of employment, and the principal challenges in financing and funding greater prosperity for people’s lives across the UK. such investment. Regarding productivity, infrastructure services Reducing the cost of infrastructure services and stimulate aggregate supply and demand through at improving service provision can, therefore, have Following this we will: least two channels. First, transport, water, and far-reaching implications. Realising the benefit